Montana re-regulates utilities

While Ohio continues to march toward deregulation of electricity, Montana is going the opposite
direction.

NorthWestern Energy, a regulated utility,
said today it is buying a series of hydroelectric plants from PPL Corp. The
$900 million deal means that the same company will own the power plants and deliver the power, a
setup that was typical in the state until the mid-1990s.

"This is a unique opportunity to acquire hydroelectric facilities dedicated to serving our
Montana customers for generations to come," said Bob Rowe, NorthWestern's president and CEO, in a
statement. "These facilities were originally built as part of the integrated system that we own
today and complement our existing set of supply resources. The addition of Montana-regulated,
clean, sustainable and reliable hydro power will provide supply diversity to our portfolio and will
reduce risks associated with variable fuel prices."

In the 1990s, Montana Power sold the hydroelectric dams to PPL and then sold the
electricity-delivery part of its business to NorthWestern. The change was supposed to be the
beginning of a new era of low prices from a series of competing electric companies, but the result
was a surge in prices,
according to an AP report today.

Like Montana, Ohio deregulated its electricity system in the 1990s. The difference was that Ohio
regulators saw danger signs in the market and slowed down the transition. It was only in the last
few years that the state's major utilities have changed their structures to reflect the new
system.

It remains to be seen how deregulation will affect prices for American Electric Power customers
in central Ohio.